B. Lal, Director General, ITMA

B. Lal, Director General, ITMA

The global production is about 3.5 million Metric tons (MT) per annum, whereas the present requirement of the Indian market/industry is about 3 lacs M...

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The global production is about 3.5 million Metric tons (MT) per annum, whereas the present requirement of the Indian market/industry is about 3 lacs MT which is likely to go up to 4  to 5 lacs MT per year in the 12th plan period and would entail about 7.5 lakh MT per year at the end of 13th plan period. There is no shortage of material as such rather the prices are    reportedly reduced due to latest market trend.

What is the overall situation with respect to BIS certification of international suppliers of CRGO? How many suppliers have registered so far?

 There are 15 foreign Mills in the world located in USA, Japan, Germany, South Korea, U.K., Russia, Poland, Brazil and China etc. owned by 9-10 manufacturers producing  CRGO electrical  steel  essential raw  material for  manufacture  of transformers and all of them have already got themselves registered with BIS for certification as per IS:3024 for supply of  BIS certified/marked material to Indian transformer industry directly or through their authorized  dealers.

What is the overall situation with respect to availability of prime grade CRGO?

 The global production is about 3.5 million Metric tons (MT) per annum, whereas the present requirement of the Indian market/industry is about 3 lacs MT which is likely to go up to 4  to 5 lacs MT per year in the 12th plan period and would entail about 7.5 lakh MT per year at the end of 13th plan period. There is no shortage of material as such rather the prices are    reportedly reduced due to latest market trend.

 Has the usage of inferior/scrap CRGO subsided over the past few years?

 Despite quality Control Order issued by  Ministry of Steel in March 2012 effective from July 2014 (due  to strong lobby of vested interest), has not  much impact  on the use of spurious /used/scrap CRGO for  the manufacture of transformer in India. Protected agitation in writing at all levels have failed as  these unscrupulous elements device ways and means  to  bring this material with the connivance of  custom authorities.  There is information that spurious /used/scrap CRGO  is being imported in the form of  laminations  as transformer parts   from the neighbouring countries . Of late even rejected/scrap CRGO styled only   as scrap steel from aboard  in large quantities  finds  its   way in the transformer industry  and is being  used for manufacture of transformers.  The answer to your  question is too long  and it  can’t be summed up in the interview.  In fact ITMA has written  and sent a white  paper after it was  asked by  Department of Heavy Industries (DHI), Govt. of India  in one of its meetings as the Chairman, Jt. Secretary of the meeting implored on the representing  associations.  The white paper has already been uploaded  in ITMA’s website (www.itma.org.in) where it has been  dealt  with at length and  even suggest ways and means how to stop this  menace of   import of    that spurious /used/scrap CRGO    material.  Besides   procurement of transformers by the utilities/discoms  on L1 criteria ,   without  justification of the cost of the material input , has also  increased the use of   spurious /used/scrap CRGO   material  in the manufacture of transformers as  the CRGO lamination  as core material of transformers constitutes  50% of the  cost of the transformers.

What has been the success rate with respect to BEE rating for distribution transformers?

 BEE’s notification dated 2010 is mandatory  in  its Standard and Labeling Programme under  Energy Conservation Act 2001,  to produce and use star rated (1to 5) Energy Efficient DTs  in the power sector. However  it was incumbent  upon  stakeholders to use  minimum 3 star rated DTs or above  under CEA’s notification 2010.  It is  being followed and even used  today,  being  under  mandatory certification.

It may be noted that quality  of product is a big concern  even at the highest level of Hon’ble  PM  who  had declared a slogan “Zero Defect, Zero Effect” and implored on industries not to compromise on quality on products  and environment  in his address to the Nation  from the  rampat of Red Fort on  15th August 2014   the  Independence Day . Even Ministry of Heavy Industries , Department of DHI issued  a quality control order on Electrical Transformers ,  on 7th May 2015 effective from  1st February  2016 to ensure the quality of energy efficient distribution transformers  as per IS:1180 Part 1/2014 and   it became  mandatory for manufacture/ purchase and use only  BIS certified/ marked transformer and the compliance  of this order has also been enforced.

Now there is a  conflict, the  manufactures are requesting Govt. of India  to allow  them the  compliance of one of the authorities/  agencies directive i.e. BIS or BEE  for the  same goal  of  producing Energy Efficient DTs,  and should not  insist upon  as in both the cases, they are supposed to manufacture Energy Efficient  Distribution Transformers as per only one standard  IS:1180 Part 1/2014.  But Ministry of Power  has shown its helplessness as in both cases it is mandatory  through Gazette Notification, which obviously is not desirable as  manufacturer has to observe and complete, all the  formalities/ requirements of both  the agencies which  not only create hindrance in conducting the business with ease  but also  involves lot of time and expenditure of yearly  renewal of licence and  hefty BEE’s labeling/BIS marking fees of each types of unit produced. Besides the suggestion shall save the administrative work of one of the Govt. Agencies. ITMA has requested to PMO to intervene, vide its letter No. ITMA/11/2016 dated 13th October 2016.

Do you feel that the UDAY scheme for financial restructuring of power distribution utilities help them to procure quality material? What is your view on the L1 procurement policy that appears to the primary reason for inferior distribution transformers being inducted in India’s power grid?

 The concept of  UDAY is excellent meant  for  Discoms to improve their financial health as they are  under burden of debt of about 4 to 5 lakhs crores. The Financial  crunch is solely due to theft  of electricity coupled with cheap/free electricity to Agriculture Sector etc.  The  main feature of the scheme is that the respective state power authority is required to take over 75% debt of  the utilities during the  preceding  and current year in the ratio of 50% and 25% and shall issue the necessary bonds while Govt. of India  shall help the states in the budgetary deficit.  Besides in order to improve T&D system of the  IPDS (earlier APDRP) & DDUGJY (earlier RGGVY) for urban and rural  network have  allocated  lot of funds for which Govt. of India/MOP had authorized REC/Power Grid for procurement of quality material at reasonable price    under guidance of CEA with common specifications   for all the states,  but later on this method was abolished   and the respective state  is  allowed  to  carry out  development programme as  per  uniform specifications  and standards approved by CEA under  DDUGJY and IPDS schemes  at National level  in order to maintain quality of  the equipment.  It is expected that UDAY scheme   would   yield  very good results  within couple  of years in reducing  generation cost   and  improving operational efficiency thereby reducing  interest liability with financial discipline.

Only such drastic steps will bring significant improvement and will make them self- sufficient for  purchasing  power  in a  bid  to provide reliable  supply 24×7  to the consumers.  Such efforts shall remove all the pressure on Ministry of Power thereby allow-ing  optimum utilization of the installed  capacity in the country  as at present most plants are  running below their capacities, besides  assurance to the discoms  to  earn reasonable  profit which will lessen the  burden  on states and ultimately on the  Central Govt. UDAY is  an excel-lent  scheme  in the right direction  and would be  a  success if all measures adopted  without bringing any politics for free  electricity, or  ignoring   theft or  tolerating  inefficiency rather  accomplishing all  tasks given  to the states/ discoms as they have   lot  at stake   of discharging debt obligation.      Only time will tell the outcome as it  is the most prestigious decision of the central Government to   bail  out   discoms in order to make them financially strong so as to  give  power 24×7 to all  at reasonable cost with complete  customer  satisfaction and also ultimately help to realize our Hon’ble  Prime Minister’s vision i.e. “POWER FOR ALL”  besides electrification of 18500 villages by 2019 as declared in  his address on the rampart of  Red Fort of capital of India on 15th August 2015.

As far as the matter of transformer procurement policy of L1 it pointed out that normally the purchaser of transformers, utilities/discoms place the contracts on the lowest offer criteria (L1) which infuse the use of non-prime/seconds/used material in manufacturing of transformers. It is observed that with this L1 philosophy the orders are placed even at the prices which do not even cover the material cost of the transformer. It is proposed that realistic cost level of each category of transformer should be worked out with the realistic price of the prime material by the special cell of the purchaser and the orders should not be placed below the realistic price fixed for each category coupled with the stringent checking by the purchaser/utilities/discoms at each stage of manufacturing of transformers, which aspect in generally provided in the technical specifications.

Some large Chinese manufacturers (e.g. BTW and TEBA) are setting up shop in India for transformers? What could be the possible impact on Indian manufacturers?

 The main reason of new entrants from abroad in the Indian  market is either due to economic  slowdown or excess/surplus  manufacturing transformer capacity.  TBEA  Chinese Co. has set up a plant in Baroda,  Gujarat while Toshiba a Japanese Co. has acquired  Vijay Electrical at  Hyderabad.  Besides Hammond Power Solutions  a  Canadian Co. has acquired majority stake in the Hyderabad   based  transformer  manufacturing  Pan-Electro Technic Enterprises (P) Ltd.  These all Cos. Have made their own calculations  to enter Indian market due to  huge India’s power requirement necessitating development  of massive T&D infrastructure in the successive 5 years plan periods.  As a matter of fact there will not  be any substantial  impact of these outsiders but would generate healthy competition for producing quality higher  voltage class transformers.  Moreover Power Transformers Cos. For 400 KV &above mainly include ABB Ltd, Alstom  T&D, Siemens are basically  International big manufacturers who  cater   the high value transmission projects and even carry out export as well. Besides  domestic and export demand of power transformers is also met by  our Indian Cos. Such as BHEL, CGL, EMCO, BBL, Prime Meiden Ltd (PCI Group), PME Power Solutions etc.

What is your view on the apparent lack of testing facilities in India, especially for high-voltage transformers?

 The Position of testing of both Distribution & Power Transformers is not  very satisfactory.  DTs are only tested at CPRI Bhopal & ERDA, Vadodara as both are recognized by BIS.  Recently NTH at Ghaziabad  is in the process of being recognized by BIS.  ITMA has requested Govt. of India/MOP and DG of  NTH  Kolkata to   establish Test Houses in all states as DT  manufacturers have to get the transformer   tested by hauling long  distances which in fact  add to the cost and involve lot  of time  for supply to the   customers.

In so far testing of power transformers   is concerned, CPRI at Bangalore  is  carrying out  testing  upto 100 MVA units of 220 KV voltage class but  it  lacks recognition  in some  part of world.  ITMA has requested CPRI to add all facilities and  get it equipped  in order attain/acquire International recognition  .  So  far, all large Power Transformer manufacturers  have to send their units to KEMA (Neitherland), KERI (Korea) & CESE (ITALY) which involves lot of cost and time etc.  It is however heartening to note that Govt. of India/MOP has established UHV testing station at Bina (MP) with  consortium of big players  like BHEL, Crompton under the patronage of  Power Grid  and CPRI and reported to be  ready to carry out testing of all units upto  400 KV voltage class from January 2017 onwards whereas for higher voltage upto 800 KV it will take some more time.

How has ITMA been fairing with respect to growth in membership in recent years? What are the important items of ITMA’s agenda for the overall betterment of the transformer industry?

 ITMA is maintaining  status quo  in  respect of   membership  and new members are being added  that too who are more conscience about the quality of  the transformers  and their  ancillaries.

ITMA has been following agenda for overall betterment of transformer industry

a)Has been holding  conferences/workshops with all stakeholders   in various states  for  awareness of  Governments initiatives on  Energy Efficient DTs and shall continue  the same  in the next calendar year from 2017 January onwards.

b)Revising/updating  the Indian Standards   on Transformers and its accessories   by including the best practices  and  the  material available  due to technological   developments.

c)Pursuing  with the  Govt. agencies  to ensure  the implementation  of the quality control orders  on  electrical transformers and  CRGO material so that  only  quality material  duly BIS certified  is used  in the manufacture  of transformers in order to ensure the quality of the   product  for domestic and export  market.

d)Pursuing  with the concerned ministries  i.e.  MoP, MoS, Consumer Affairs , MSME ,Heavy Industries  and all   the Govt. Agencies  for   policies  to ensure   ease of doing business  by  our members  during the   current fiscal year of financial  crunchat  global level.

e)To pursue with Govt. of India  to establish Test Houses for distribution Transformer in each state in order to  facilitate the testing  of transformers in order to  supply DTs  for  completion of  electrification projects  and to ensure  24×7  supply of power to all  beyond  2019.

f)To conduct  International Conferences on Transformers  in order to  interact with the International Transformer  fraternity and  adopt  latest technological advancements  in producing  quality  transformers.